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Apple may broaden $50bn US manufacturing base

Tim Cook has signalled that Apple would look to broaden its $50bn US manufacturing and supplier base, as the iPhone maker faces looming pressure on domestic job creation from the Trump administration.

Apple would also step in to defend net neutrality, its chief executive said, if the principle protecting even-handed management of internet traffic was threatened by the new head of the Federal Communications Commission, the US telecoms regulator.

“We love this country,” Mr Cook said at the company’s annual meeting in Cupertino. “We will continue to look for ways to expand and help in any way that we can.”

Apple already spends around $50bn a year with US-based suppliers, Mr Cook revealed for the first time, in response to a question from a shareholder about American job creation. The world’s most valuable public company supports “several hundred thousand jobs” across its vendor base, he said, in addition to more than 1m software developers who make their living through its App Store.

“We also do a fair amount of manufacturing in the US,” Mr Cook said. Semiconductors, adhesives and glass screens for the iPhone are all made in America, he said, even though the device’s final assembly is largely done in China and a large majority of Apple’s components are sourced from suppliers in Asia. 

“A lot of the fixation in manufacturing is in the final thing, because that’s what people see,” Mr Cook said, “but that sort of discounts the reality” of Apple’s American supply chain.

Two-thirds of Apple’s employees are in the US, he said, despite only a third of its revenues coming from its home country.

. . . we are always looking for more ways that we can help our country. We know that Apple could only exist in the US

“Having said that,” he continued, “we are always looking for more ways that we can help our country. We know that Apple could only exist in the US.”

Asked by another shareholder if Apple would lobby in favour of net neutrality, an Obama administration policy that incoming FCC chairman Ajit Pai has called “a mistake”, Mr Cook replied: “If net neutrality became a top thing, yes we would definitely engage in it . . . We think people’s content should be treated the same. There shouldn’t be an unfair advantage for one group over the other.”

Despite taking a forceful position on issues ranging from encryption to human rights, Mr Cook insisted: “We are not the big lobbying company.”

Pacing up and down the stage of its Town Hall at its Infinite Loop headquarters with his hands in the pockets of his jeans, he said: “We don’t like politics. We are sort of averse . . . We do know that playing a role in policy discussion is good and very important for us to play. We stay out of politics but into policy.”

Via FT